Posted: 22 June 2009 1324 hrs

JapaneseStocks File picture of a share prices board in Tokyo

TOKYO: Japan's large companies were less pessimistic about the economy in the year's second quarter than they were during the previous three-month period, a government survey has shown.

The large company business sentiment index on current conditions was at minus 22.4 in the second quarter against minus 51.3 in January-March, according to a joint survey by the Ministry of Finance and the Cabinet Office.

The index is calculated by taking the percentage of companies that see an improvement in the economy and subtracting from that the percentage of companies that say the economy is getting worse.

The outlook index for big companies stood at minus 2.6 for July-September last year, and at plus 8.7 for the October-December period.

The recent improvement raised expectations that the Bank of Japan's closely watched "Tankan" business confidence survey, due on July 1, may also point towards a bottoming-out of Japan's worst recession since World War II.

The Nikkei financial daily reported on Sunday that the Tankan survey by the central bank would likely show the first improvement in sentiment in two-and-a-half years among major manufacturers.

The index in January-March slumped to a record low of minus 58, as the world's second biggest economy slid deeper into recession.

But it is forecast to recover to minus 41 for the April-June quarter, the daily said, citing estimates by 25 private research bodies.

Official data have shown Japan's economy, Asia's biggest, shrank at an annualised 14.2 per cent in the first quarter of 2009, its worst rate on record.

- AFP/yb

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